1. Field of the Disclosure
The present disclosure relates generally to facilitating and/or providing benefits to employees and retirees. More specifically, the present disclosure relates to an electronic computer implemented system and method for configuring, optimizing, selecting, managing and tracking alternative funding of employee and retiree benefits and benefit plans.
2. Description of Related Art
Conventionally, employers have provided retirement benefits including pensions, defined contribution retirement and other retirement programs funded by trusts which invest in marketable securities. Retirement trusts have also invested in instruments issued by third party insurance companies in which they have no stake, or other investments. These investments do not always pay returns or increase in value when the trust needs the money due to upcoming payments or an increase in the measurement of the retirement programs' liability.
Additionally, when an employer wishes to terminate a pension plan, they have conventionally purchased terminal annuities from an external insurance company. This insurance company takes on the obligations of the plan, for a payment. The insurance companies have traditionally charged a very high price for this service. Additionally, if the experience of the plan in subsequent years is better than the conservative pricing implies, the insurance company keeps the profit.
Additionally, commonly accepted accounting principles have forced employers to reflect the funded status of retirement programs and pensions on their corporate financial statements.
Additionally, changes in retirement programs' and pensions' regulation have led to accelerated funding schedules based on the funded status of retirement programs.
This trend has put a substantial strain on employers, on employees and their families, and on retirees and their families. Employers' long term liabilities appear to be more costly due to short term market movements and the employees and retirees become concerned about adequacy of benefits if the assets and liabilities of the plan do not match. Accordingly, a system is needed to assist employers in investing the retirement programs' assets in vehicles that will respond to market movements in the same way as the plan liabilities, without undue cost to the employer.
Additionally, the system should assist with the orderly and secure termination of pension plans in a way that is affordable to employers and provides benefit security to employees and retirees.